Which cryptocurrencies are most traded for bitcoin?
One single currency accounts for more than half of all trade.
Ask most laypeople about cryptocurrencies and blockchain and they will almost all say they've at least heard of bitcoin. It's almost become the generic term for cryptocurrencies, just like "Hoover" means vacuum cleaner and "Xerox" means photocopy, but bitcoin is more than just a cryptocurrency. It's often the currency most traded for traditional, or fiat, currencies issued by the treasury departments of other countries. So, which fiat currencies are the most traded for Bitcoin?
Brokerage and investment group CLSA has conducted some research and found the Japanese yen is the currency most traded for bitcoin, accounting for over half of all national currencies traded for bitcoin.
Rounding out the top five are the US dollar (almost 28%), with the Korean won, euro and Russian ruble making up most of the remaining 20%.
"While China and Korea have been scrambling to close down exchanges and clamp down on cryptocurrencies, Japan in April 2017 passed a law — the Payment Services Act — recognising cryptocurrencies as legal tender," CLSA analyst Nicholas Smith explained to Business Insider. "The result was that China — which had dominated bitcoin trading — dropped off the map, while Japan has risen to number one."
China's decision to discourage cryptocurrency mining has caused a significant correction in the market, while Japan's launch of a new exchange could further buoy the use of the yen in trading cryptocurrencies. It's also possible South Korea's decision to hit cryptocurrency exchange profits with a 24.2% tax could see that currency traded with less vigour.
With cryptocurrency trading still a nascent market, and national treasuries looking at what regulation might be needed and how they might be able to siphon revenues through taxes and other mechanisms, we can expect this chart to move over the coming months. Japan's embrace of cryptocurrency trading and the US's relatively open regulatory regime are likely to see them hold the top two spots for a while, but the rest of the market could see some movement as traders get a better handle on how to make stronger deals and regulatory structures start to form.